Employing staff Dates
JUL 20Employer deductions payment due for 1 to 15 July if you deduct more than $500,000 PAYE and ECST per year.
JUL 20Employer deductions payment due for June if you deduct less than $500,000 PAYE and ESCT per year.
JUL 20Your FBT quarterly return and payment are due for the period ending 30 June if you have a March balance date.
Employees with CAE EDW NSW ND or tailored tax codes
Special rules apply to employees with some tax codes.
CAE or EDW tax codes
Do not use the employee’s ordinary flat rate. Use the method below for lump sum payments from primary employment.
NSW, ND, or tailored tax codes
Use the rate you usually would for this employee to calculate the PAYE due on the lump sum payment. Do not use the method described below.
Calculate the grossed-up annual value of the employee's income
If the employee is paid more than once a month
Add up the employee’s income payments for the 4 weeks ending on the date of the extra payment. Multiply this number by 13 to calculate the grossed-up annual value of their income.
If the employee is paid once a month
Multiply the employee’s monthly income by 12 to get the grossed-up annual value of their income.
Add the secondary threshold amount for secondary tax code users only
If the employee does not use a secondary tax code
Ignore this step.
If the employee uses a secondary tax code
Add the low threshold amount for their secondary tax code to the grossed-up annual value of their income.
|Secondary tax code||Low threshold amount|
Calculate the PAYE rate
Add the lump sum payment to the grossed-up annual value of the employee’s income (including their secondary tax code’s low threshold amount, if appropriate). Find the correct row on the table below. The PAYE rate for the lump sum payment is listed alongside.
Most lump sum payments are subject to the ACC earner’s levy. Redundancy payments, retiring allowances and employee share scheme (ESS) benefits are not, regardless of the income source. The ACC levy for 2019-20 tax year is only paid on the first $128,470 earned.
|Total of lump sum payment and grossed-up annual value of employee's income (including the secondary tax code's low threshold amount, if appropriate)||PAYE rate (including 1.39% ACC levy)||PAYE rate for redundancy, retiring payments or ESS benefits (excluding 1.39% ACC levy)|
|$14,000 or less||11.89%||10.50%|
|from $14,001 to $48,000||18.89%||17.50%|
|from $48,001 to $70,000||31.39%||30.00%|
|from $70,001 to $128,470||34.39%||33.00%|
|More than $128,470||33.00%||33.00%|
Low PAYE rate notification
If the lowest PAYE rate is applied to the lump sum payment, tick the relevant box on the Employer monthly schedule (IR348).
What happens next
You may also need to deduct student loans or KiwiSaver from a lump sum payment.
Submitting payments separately or together also affects the account type you choose when making a payment to us.